Shanghai has installed video cameras in its internet cafes in order to monitor users.
Around 80 million people are online in China
The measure is part of a six-month campaign to bring the city's internet bars into line, the Shanghai Daily reported.
Software is also being installed to scrutinise the viewing of pornographic or "superstitious" sites.
China is believed to extend greater censorship over the web than anywhere else in the world.
The video cameras will help determine whether any visitors to Shanghai's 1,325 internet bars are under 16.
The software will send a message to a supervisory centre if users try to view what the Chinese Government considers unsuitable material, including websites containing information about the banned Falun Gong movement, the Shanghai Daily said.
It will "spot illegal activities immediately", said Yu Wenchang, who is in charge of the project.
The software will also require Chinese users to input their identity number, and foreigners their passport number.
In addition, 600 volunteers will be sent out sporadically to inspect the city's internet cafes.
The paper said 57 internet bars which have violated the regulations have already been reprimanded or shut down.
China has always been wary of the web as a means of disseminating information critical of the government, but internet cafes have faced even greater scrutiny since 25 people were killed in a fire in a Beijing establishment two years ago.
The tragedy highlighted the abundance of unlicensed internet bars in China's cities, and they were subsequently closed down.